London open: Financials in the lead, homebuilders move lower

Financials were leading gains on the Footsie early on Monday, with utilities and homebuilders again bearing the brunt of the selling pressure on the top flight index after Friday´s much stronger-than-expected US jobs report for October.

The FTSE 100 was trading up by 0.33% to 6,374.53 points.

The US non-farm payrolls report saw Fed funds futures move to price-in about a 70% chance of a first Fed rate hike arriving in December.

Meanwhile, the Shanghai Stock Exchange´s Composite Index gained 1.58% or 56.85 points to 3,646.88.

Investors thus seemed to brush-off news that China’s exports fell 6.9% year-on-year in October while imports dropped by another 18.8%. Economists had penciled in year-on-year declines of 3.2% and 15%, respectively.

According to Deutsche Bank´s Jim Reid, news out on Friday - after the close of markets in Shanghai - that the country´s securities regulator is set end its five-month freeze on IPO’s may have contributed to the better 'tone' in the market today. On the 'flip-side' however, the announcement appeared to spark some concern regarding possible capital outflows, pushing 10-year yields 10 basis points higher to 3.25% - the biggest rise since 5 December last year.

Speaking over the weekend, San Francisco Federal Reserve president John Williams said "it makes sense to gradually remove the policy of accommodation that helped get the economy to where we are," adding he would wait to see the data published before the next FOMC meeting before making up his mind regarding his vote.

That helped to balance out more hawkish comments from his peers at the Chicago and St.Louis Fed on Friday.

On Friday, the Dow Jones Industrial gained 46.90 points to 17,910.33, the S&P 500 drifted fractionally lower by 0.73 points to end at 2,099.20 (but was 1% higher for the week) and the Nasdaq Composite advanced 19.38 points to 5,147.12.

Regarding today´s Chinese international trade figures, Michael Hewson, chief market analyst at CMC Markets UK said: "The yuan is now back at the levels it was against both the euro and the Japanese yen prior to August’s devaluation, making Chinese exports much more expensive in its two biggest export markets. In this year alone exports to Japan have declined 9%, and to the EU they have declined 3.7%.

"This suggests that it seems likely that at some point Chinese authorities may have to take further steps to ease policy further, with potentially another move in the US dollar peg likely in the coming weeks, and months."

The US Federal Reserve´s Labor Market Composite Index for October is set for release in the afternoon.

IHG not studying either a sale nor a merger

InterContinental Hotels responded to recent market speculation saying it is not considering a potential sale or merger of the company. On Friday, shares in the company surged following a report it was mulling the possibility of a sale or merger. Bloomberg cited people familiar with the matter as saying that IHG is in discussions with financial advisers about whether to sell itself or merge with a competitor as the sector consolidates.

Singapore Airlines will deploy Inmarsat's GX Aviation service on its long-haul fleet starting next year. The FTSE 100 mobile satellite communications services announced the deal on Monday. GX Aviation delivers high-speed broadband over its Global Xpress satellite network. It will first be installed on the airline’s Boeing B777-300ER aircraft in the second half of 2016, followed by its Airbus A380-800s and A350-900s. It is the second major airline the company has signed a deal with in the last month, after securing a 10-year contract with Lufthansa in October to provide the service.

National Grid has filed a request with the Massachusetts Department of Public Utilities to update its electricity distribution rates. The company said it was the first time since it has filed such a request, which will impact all electricity companies operating in the state if it is approved. National Grid is requesting an increase of around $143m (£95m) a year in electricity delivery revenue to cover increased operating costs and investments made in its electric delivery network.

Aggreko maintained its full year-profit expectations despite a challenging market backdrop, as it reported a fall in third quarter sales. In a trading update for 1 July to 8 November, the temporary power provider said underlying revenue for the period was 7% behind last year, with reported revenue down 6%. This was partly a result of the continuing weak economic backdrop in Brazil.

Bank of Georgia said the initial public offering of shares in its Georgia Healthcare Group (GHG) unit would be priced at 170p each, valuing the company at £218m ($328.7m). The IPO is 38.7m shares to raise £66m ($100m) which will be used to renovate and develop the recently acquired Deka and Sunstone referral hospitals in Tbilisi, adding approximately 500 beds to existing hospital capacity, the company said.

Lonmin announced it would carry out a £271m ($407m) rights-issue.

Stock in TalkTalk was lower on the back of a report in the Daily Telegraph that the company might scrap its dividend as its finances come under intense pressure in the wake of its "crippling cyber attack".

Market Movers

FTSE 100 (UKX) 6,374.53 0.33%
FTSE 250 (MCX) 17,230.49 0.38%
techMARK (TASX) 3,101.53 0.12%

FTSE 100 - Risers

Standard Chartered (STAN) 629.00p 2.33%
Barclays (BARC) 237.65p 2.26%
Aberdeen Asset Management (ADN) 354.70p 2.04%
Glencore (GLEN) 118.00p 1.86%
HSBC Holdings (HSBA) 536.60p 1.67%
Rio Tinto (RIO) 2,318.00p 1.58%
Anglo American (AAL) 532.60p 1.37%
Ashtead Group (AHT) 1,030.00p 1.28%
Antofagasta (ANTO) 520.50p 1.17%
Rolls-Royce Holdings (RR.) 707.00p 1.14%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 2,667.00p -3.86%
Taylor Wimpey (TW.) 178.30p -1.76%
Hammerson (HMSO) 606.00p -1.54%
Land Securities Group (LAND) 1,289.00p -1.45%
Severn Trent (SVT) 2,155.00p -1.37%
United Utilities Group (UU.) 947.50p -1.04%
Barratt Developments (BDEV) 571.50p -1.04%
British Land Company (BLND) 830.50p -0.95%
Intu Properties (INTU) 333.80p -0.95%
Imperial Tobacco Group (IMT) 3,474.00p -0.88%

FTSE 250 - Risers

Tullow Oil (TLW) 241.40p 10.63%
Premier Oil (PMO) 81.80p 9.29%
Aggreko (AGK) 1,011.00p 8.48%
Serco Group (SRP) 106.30p 7.00%
Hunting (HTG) 361.10p 4.88%
Amec Foster Wheeler (AMFW) 546.00p 4.10%
Kaz Minerals (KAZ) 104.20p 3.89%
Evraz (EVR) 86.60p 3.46%
Jimmy Choo (CHOO) 156.50p 2.96%
Jupiter Fund Management (JUP) 464.40p 2.86%

FTSE 250 - Fallers

TalkTalk Telecom Group (TALK) 217.00p -4.02%
Shaftesbury (SHB) 906.50p -1.79%
Crest Nicholson Holdings (CRST) 515.50p -1.43%
Grainger (GRI) 240.10p -1.27%
Capital & Counties Properties (CAPC) 422.20p -1.26%
Bellway (BWY) 2,464.00p -1.16%
Derwent London (DLN) 3,718.00p -1.06%
Circassia Pharmaceuticals (CIR) 282.00p -1.05%
LondonMetric Property (LMP) 163.80p -1.03%
St. Modwen Properties (SMP) 434.00p -0.96%